Hello and welcome to World Today, I'm Ding Han in Beijing.
Coming up, China has set 4.5 to 5% as the country's 2026 economic growth target.
China will send a special envoy to the Middle East for mediation on the Iran conflict.
A US court is ordering US customs to process refunds on illegal Trump tariffs.
The European Union proposes made-in-the-EU rules for strategic sectors.
To listen to this episode again or to catch up on our previous episodes.
You can download our podcast by searching World Today.
First up.
A government work report says China is targeting an economic growth of 45 to 5 this year and it will strive for better in real practice.
Main economic targets also include an increase in consumer price index of about 2%.
China has pledged to continue to implement a more proactive fiscal policy in 2026.
The work report has been submitted to the country's national top legislature for deliberation.
The 14th National People's Congress opened its fourth session on Thursday.
Delivering the report, Chinese Premier Li Qiang said the country's economy has proved to be remarkably resilient over the past year.
The report says China will open wider to the outside world, with efforts in expanding market access and opening up more areas, especially in the services industry.
China is vowing to drive advances in original innovation and breakthroughs in core technologies.
In the meantime, the draft outline of China's 15th Five-Year Plan has been submitted to the national top legislature for review.
So joining us now.
On the line are Professor Jiang Gong from the University of International Business and Economics, as well as Sultan Ali, a China affairs observer and a retired Air Force officer based in Pakistan.
So thank you very much for joining us, Salton and Professor Gong.
Professor Gong, to start with you, let's begin with China's economic growth target for 2026.
Is this a realistic target in your opinion?
It is a little bit the conservative side.
You know, they're not talking about a particular point of growth.
They're talking about a range of growth between 4.5% and 5%.
And it also says that it would do it best to sort of reach the high end of this.
And if you compare the growth last year, 2025, it's 5% on target.
So I think it's already getting itself some room, so that even the economy is not going as fast as last year.
You know, there's a fairly large cushion.
So I think it's a realistic target.
And I think it's quite likely that you know, 45 is something that's not that difficult to achieve in my view.
So what do you make of the main headwinds or uncertainty that China's economy is faced with at home and abroad over the course of this year, Professor Gong?
I think there are challenges both domestically as well as internationally.
Domestically.
I think we're still facing a sort of a slowing down of the real estate property market.
The traditional economies, the traditional parts of the economy is still sort of anemic in my view, coupled with the debt problem associated with the local governments.
These are the old problems and the government trying to their best to address this problem.
And internationally.
I think it's mostly the challenge manifesting In the unstable international environment, global environment.
We have multiple wars going on at this point.
And also, you know, these wars have implications for the global oil supply, global supply chain.
All these things are challenged.
We did a very good exports for last year.
International trade grew by 6% last year, whether we'd be able to maintain the same momentum.
I'm more on the conservative side.
I think the international environment that's sort of turbulence right now is the biggest challenge.
And hopefully we can behind these walls very quickly and you know global flows of goods and capitals could follow very quickly.
Okay.
So Selton, going to you, some say the growth target for this year is a signal of China's further shift from a so-called numbers-forced growth mindset towards a quality-forced or quality-oriented one.
Would you agree?
Oh, I absolutely agree, Ding Heng, because the target reflects a pivot towards quality driven growth and also a focus on innovation, sustainability and balanced development.
Moreover, a maturing economy where social welfare and environmental responsibility matter as much as GDP.
So in a nutshell, it is quality first growth for a maturing economy.
Now the work report has pledged to further improve living standards and boost the consumer spending, saying that the government would issue 250 billion yuan, or some 36 billion US dollars, in this year, in terms of bonds for rebates to consumers to participate in those trade-in programs.
Professor Gong, how can China boost domestic demand in the near future?
This is a continuation of the program last year.
One of the challenges of China's economic growth is to beef up domestic consumption.
One way of doing this is to provide some incentives rebates from tax collected, as well as some fiscal subsidies for consumption.
The scale of subsidies this year, as said in this document, is actually a much reduced amount compared with last year.
You look at the $36 billion, I mean, that's a huge amount of money, right?
It goes a long way in terms of boosting consumer expenditures.
So I think the effect of this will be felt soon.
The way to finance this, partially, is through issuance of government bonds, long-term bonds.
Last year there was empirical evidence to show that these rebates, these incentives, do help with consumption.
And I would expect the same pattern into this year.
So Selton, in your opinion, how can China boost the domestic demand and the consumer spending, not only for this year but over the course of the next five years, namely the 15th five-year plan period in China?
What do you make of the main factors that are still prohibiting or curtailing China's potential to unleash its consumer power?
Yeah well, what the professor just mentioned strengthening the social safety nets to reduce precautionary savings.
Now, it was just mentioned that the issuance of the 250 billion yuan in consumer bonds for trading programs is not only bold, but it is a near-term stimulus.
Beyond this, China can boost demand by expanding the middle class and encouraging consumption of green, digital and high-quality goods.
Also strengthening social safety nets, health care pensions, education to reduce precautionary savings and free up household spending.
Also, promoting urbanization and rural revitalization, which are very important.
And they naturally expand the consumer markets.
Now, together, these measures aim to shift growth from investment heavy to consumption driven.
So, Professor Gong, I mean, if we talk about those government subsidized trading programs, consumer trading programs, I think they are more often than not focused on consumption on the material side, on consumption of material goods, right.
But nowadays, it seems, a political focus or a policy focus is more focused on boosting the services consumption in China.
So, with that in mind, do you think there is a shift when you were mentioning that this year's quota for these trading programs was actually reduced compared to last year's quota?
Well, there's actually an economic word for this.
It's called durable good.
Previously, the rebates and incentives are mostly associated with purchases of durable goods.
A large portion of it has to do with things related to renovation of new houses, new condo apartments or moving to a new condo apartment.
With the slowing down of the real estate market, I think a lot of these expenditures are are going away, or at least not growing as fast as in the past, maybe even reduced.
So I think the focus is the service-oriented consumption.
I think there's a structural change going on in China's consumption.
People are not spending as much as things related to the housing.
As opposed to things related to you know a better consumption experience.
Things related to leisure, for example not necessarily associated with you know, decorating or refurbishing apartments.
To the consumption, in my view.
So the government does not want to leave behind that part of the consumption.
In other words, things related to experience goods, right?
Things related to leisure travel, dining experiences, things of that nature as opposed to things related to refurbishing an apartment, renovating an apartment, things like that.
Now the work report has pledged more efforts to build a unified national market and address those involution-style competition.
So, Professor Gong, how could the efforts in this regard help boost domestic demand here in China?
Well, a unified market is actually very important.
It goes back to the, the first American antitrust law to eliminate any practices that impede what they call inter-commerce trade.
Here in China, we're pretty much doing the same thing taking down any barriers to inter-provincial or inter-regional trade, ruling out practices that impede competition from other areas.
I think the fundamental issue is that a unified market contributes to efficiency.
There's plenty of empirical evidence in economics literature talking about the integration of the market.
A unified market contributes to economic growth. increases competition, increases efficiency.
Usually people don't quite understand why a unified market has something to do with the consumption pattern right.
Enhancing consumption is actually very important.
There's a basic economic theory behind it.
So that's why I think, by working towards a unified market is one of the ingredients to enhancing consumption as well.
Now, in the meantime, China has set a target of creating 12 million new urban jobs in 2026.
The work report mentions the building of an employment-friendly development model.
So, Salton, how do you think China can build such a development model?
Well, that's a very interesting question. but I'll be brief in my response.
First of all, you see, please remember that growth through labor intensive services like healthcare, education and logistics.
This can give a major boost.
Then the support for the SMEs with financing and digital tools.
This will empower the people, and then linking industrial upgrading with job creation in green tech as well as artificial intelligence, now you see, along with this, ensuring inclusive growth for the youth and migrants.
So, in a nutshell, it is jobs through services, smes and innovation.
So if we take a look at the official number for last year's economic development, Professor Gong, we understand.
The number of urban jobs created in China over the course of last year was higher than 12 million.
So I guess presumably China would find it not too difficult to fulfill this year's goal for job creation.
But, having said that, now it seems a government focus is aimed at, you know, boosting high quality employment.
So what is your understanding of higher quality employment and how can China, you know, pursue its relevant goals in that very direction?
Okay so, first of all, I wouldn't underestimate the challenges of creating jobs.
Last year, it's true that we created 12 million jobs, but We are also facing the challenge of the AI phenomenon, which means that the machines are more and more replacing people.
Demand for labor is getting smaller and smaller over the long run.
So I think that's a big challenge.
And nevertheless, I think we still try ways of creating more jobs, especially for the young people and college graduates.
When you talk about high-quality jobs, inevitably we're talking about jobs creating more value, paying more so that people have a better life.
I think it's important to have these high-quality jobs as opposed to jobs just merely meet ends meet.
It's important, especially for young people, to have a decent income so they can start their life in society.
So why do you think, Professor Gong?
According to the work report, China is planning to further open up sectors like telecommunications, biotechnology and hospitals to foreign investment over the course of this year.
Yeah, well, these are the industries that haven't been really open in the past.
It's an issue that goes back to the very beginning of China joining the WTO.
We made the commitments that some sectors would be open gradually over time.
And I think these industries are sort of the remaining in the last set of industries that foreign companies would like to enter.
And obviously there are some industries that are concerning national security, for example, telecom.
Usually it's very difficult for countries to open entirely to foreign companies because of the sensitive nature of this industry.
Nevertheless, I think it's good to see that we decide to also open the last set of industries that foreign companies want access to, including the telecom industry.
I think this is a very important posture on China's part that we're willing to open more sectors in our economy.
Over the next five years, I mean over the medium to longer term.
China has actually set a target of increasing the funding for research and development by an average of 7 annually.
So Selton, what do you think this tells us about China's resolve to pursue Scientech's self-reliance?
Well Di Heng.
This is a clear evidence that the Chinese government has a clear resolve for science and technology self-reliance.
And this goes directly in consonance with the practice and with the policies of the last many decades.
But in this particular report I noticed that it further not only magnifies, but it solidifies the resolve.
Because you see building ecosystems in artificial intelligence semiconductors, green energy, biotech now these are all very, very solid goals.
And if you pursue them, I'm sure it not only is going to lead towards SITEC self-reliance, but it will also reduce the dependence on foreign supply chains.
And also, please remember, it positions innovation as the primary driver of modernization, which I think has been the baseline for the current government and also most of the previous governments too.
So, Professor Gong, in terms of pursuing Scientech self-reliance, what do you make of the core issues that should be addressed, that should be dealt with here in China?
Is it simply a matter of increasing the funding for research and development?
Well, it's more than just a funding issue, obviously.
I think we need to have an ecosystem that is amenable to innovation, that is amenable to venture capital investment, that is amenable to getting a healthy return from those RD-related investments.
I think, after years and years of continuous investments in innovation in RD, Chinese companies and other institutions have started to see more results.
We are talking about an explosion of innovation outcomes across the board in many industries, especially in emerging new industries and sectors.
We're not just talking about one. deep-seek moment.
We're talking about a sea of deep-seek moments.
So I think the entire global sentiment and narrative about China's innovation has entirely changed.
Investments are coming back to China and companies are starting to realize this is a place for great innovations moving forward.
So, by the way, Professor Gong, do you think China's move to double down on Scientech advancement, including self-dependence, will end up driving China's own economic growth for the future?
There's no doubt about it.
I mean, if you look at the GDP composition, GDP growth composition from a sectoral basis, it's pretty clear that growth in those emerging sectors, New industries, new sectors are growing much, much faster than the traditional sectors and industries.
In some cases, we're talking about double digital growth here.
So I think there's no doubt that these sectors could be an engine of growth to drive China's economy ahead.
And my hope is that these industries and sectors will be growing fast enough to take a larger share of China's economy, to pull the entire economy ahead.
So Salton, what is your take?
Do you think tech innovation will necessarily lead to better and higher economic growth in China?
Well, thank you for asking my opinion on this.
I was hoping you would.
My take on this is that doubling down on scientific technology is not just about self-reliance.
It is about creating new growth engines.
Now you see frontier technologies like artificial intelligence, biotech and clean energy.
They will actually reshape the industries and productivity.
So in my opinion, this ensures China's economy remains competitive globally and resilient domestically.
So in a nutshell, SciTech is the engine of future growth.
So in 2026 Sultan, we understand China plans to cut carbon dioxide emissions per unit of GDP by some 38 and by 17 by the year 2030, namely by the end of China's 15th five-year plan.
So what do you think will enable China to reach those goals in terms of pursuing low-carbon development?
Well, you see, it is interesting, because these goals in pursuing low carbon development are actually achievable through expanding renewable energy capacity and also by promoting green consumption and trade in programs.
And thirdly, by advancing energy efficiency in industry and transport.
So what China is actually doing is it is aligning its climate goals with economic modernization, ensuring sustainability.
So what it stands to is green growth, cleaner future, sustainable China.
So sustainable, beautiful China.
Do you think these goals will have any inspirations for your own country, Selton?
Yeah actually, you know there is a need for such clear thinking because, as the professor also mentioned, and you are aware that we are living in very troubled times where you know there is not a clear thought process in so many of the other leading countries who are more engaged, you know in, I'm sorry to say, use the word in creating chaos and entanglement, which is not necessary.
So, amongst all this, this particular report from China and otherwise, also the slogan of green growth, cleaner future, sustainable China it stands as a loud and clear message for people in Pakistan who want to go ahead, who want to improve their quality of life.
In a nutshell, if you see, my personal opinion is that, as we look ahead, the message from this year's two sessions from China is clear that China is charting a path of stability, innovation and sustainability.
And by building a unified national market, fostering employment, friendly growth, opening strategic sectors and doubling down on green development, the country is positioning itself not only whether the uncertainties, but to lead in shaping the future global economy.
So, in a sense, China's story in 2026 is one of confidence confidence in its people, in its innovation and in its ability to deliver growth that is both high quality and sustainable, which stands as something which should be emulated by countries like Pakistan.
Thank you very much for joining us.
Sultan Khalil, a China observer and a retired Air Force officer based in Pakistan, as well as Professor John Gong, joining us from the University of International Business and Economics.
You're listening to World Today.
I'm Dinghan in Beijing.
We'll be back after a short break.
You are back with World Today, I'm Ding Hen in Beijing.
Chinese Foreign Minister Wang Yi says China will send its special Middle East envoy to regional countries to conduct mediation efforts.
In a phone conversation with his Saudi Arabian counterpart, Wang Yi said China has always been a force for peace and stands ready to continue to play a constructive role.
Regarding the escalating conflict in the Middle East, the senior Chinese diplomat said the indiscriminate use of force is unacceptable and that any attack on innocent civilians and non-military targets must be condemned.
China is urging all parties to cease military operations, return to dialogue and negotiations at an early date and prevent further escalation of tensions.
Wang Yi also spoke with the foreign minister of the United Arab Emirates, or the UAE, saying the spillover of the war serves no one's interests.
So joining us now on the line is Professor Wang Jing from Northwest University in Xi'an, China.
Thank you very much for joining us.
It's my pleasure.
So, first of all, what do you think has really made China to decide to send a special envoy to mediate in this Iran conflict?
Well, I think many reasons facilitate, or many reasons, China to send a special envoy to the Middle East to help melt down the divisions and pacify the tension in the Middle East.
First of all, I think we have to know that when the war continues, it actually attracts attention from the international society.
And every One in this war.
Now it's very focusing on this ongoing war very closely, including China, because China also wants the war to be ended and wants the peace to come back to the region.
And the second one, I think China also is very closely related to the ongoing war.
And we have to know that, when the Hormuz Strait is now under closure by the war, and the Particularly, the war is still escalating and expanding to the other parts of the Gulf region and even to the Red Sea region.
So it means that nobody is safe in this region.
And also, we know that China actually has very close ties, energy ties with the original country.
So that's why China hopes that the war should be suspended as early as possible.
Last but not least, we cannot forget that maybe within the upcoming months, the China and the Arab summit will be held.
So it is very important for China to dialogue, to hold a dialogue, to listen to the voices from the different Arab states, particularly the Arab states over the ongoing war between the United States and Iran.
So that's why many reasons finally led to China's new special envoy to the Middle East to help the local countries to establish new channels for dialogue and communication.
Now, in his phone conversation with Saudi Arabia's foreign minister, Wang Yi, said that China does not want to see the Middle East conflict spreading to Gulf states such as Saudi Arabia.
He also said that China appreciates Saudi Arabia for exercising restraint and that achieving regional reconciliation is rare and valuable and should be cherished.
What messages do you read from Wang Yi?
I think you suggested that Wang Yi as well.
China cherished the relations with Saudi Arabia very closely, because we know Saudi Arabia is a very important leader of the Arab world.
And Saudi Arabia's attitudes and stances against the ongoing war between the United States, Iran and Israel would very strongly affect the attitudes of many other Arab states.
So, when the Arab states are actually at the middle of the war because, on the one hand, they don't agree with the United States as well as Israel, the military strikes against the targets inside Iran, but also, on the other hand, they are also suffered by the counterattacks from Iran.
So make them into the kind of dilemma.
So that's why it is very important for the Saudi Arabia, as well as the other Gulf Arab states and the whole Arab world, to maintain and stay rational and restrained.
Because once they start new military activities, they start new waves of counter attacks.
It means that the war will be further escalated and the scale of the war will be further enlarged.
So that's why I think China's stance is very clear that everybody should become restrained and the dialogue should be resumed and the mediation efforts should be enhanced.
Now we're several days into this war, so what is your main observation so far regarding the conflict itself?
I think the conflict is still ongoing, as we see clearly, and we cannot forget the possibility of further escalation because, from the rhetoric from the United States, they believe they are fully prepared for maybe the war to be prolonged, as Donald Trump mentioned that maybe the United States will continue to attack Iran for more than another week, nearly another two weeks.
It would be very dangerous for the original country.
And also from the Iranian rhetoric very assertive and very hardline rhetoric particularly the ongoing political transition of the supreme leader inside Iran.
It means that Iran might also continue counterattack.
So that's why I think the war will continue.
But also, on the other hand, we cannot forget that the willingness of the international community, as well as the original countries, for the peace come back is also gradually enhanced.
Because the Arab states don't want the war to continue and the global countries don't want the war to continue.
So that's why the peace efforts will be enhanced too.
So that's why opportunities and the risks are combined together.
And that's why we're facing a very crucial moment right now. not only the international community's sentiment is against this ongoing conflict but also i guess overwhelmingly domestically in america opinion polls have shown that most americans don't agree or don't support this war with Iran.
But that being said, Dr Wang, why do you think a bipartisan resolution in America aimed at limiting President Donald Trump's ability to wage war in Iran, to continue to do so, has failed to pass in the US?
Senate?
Well, I think because in the Senate, because the Republicans, they are the majority, the seats they enjoy the majority seats.
So it would be very difficult for any kind of the proposal to be passed into the kind of the act or the law to limit the power of the president for declaration of war.
But you are right because even during the past two months, or nearly three months, many things, particularly the White House, violate the very clear borders of the power or the authority between the White House and the Congress because, as you mentioned, the declaration of war abroad belongs to the hands of Congress, where the White House has no power or authority to declare war or launch a major war against any other foreign countries.
Although right now the United States.
According to the rhetoric of Donald Trump, they didn't declare war.
But actually what they are doing indeed, is start a war in Venezuela and also to start another war.
Right now is ongoing in Iran.
And that right now is bringing all of the Americans in the Middle East into the dangerous scenarios.
So that's why I think it is a very crucial time, not only for the original country, as you mentioned, but also it's a very important time for the United States people themselves to determine what the country should be and what the future of their country's foreign diplomacy, as well as political structure, should be constructed in a very critical moment right now.
The final question before we let you go, Professor Wong.
We understand the United States has a history of working with Kurdish groups in Iraq, in neighboring Iraq and Syria, etc.
Now, according to multiple media reports, the U.S. is in talks with opposition Kurdish forces here.
In an attempt to arm them and create an uprising domestically in Iran.
What could be the danger of such a move if those media reports are true?
I think maybe it's true, but I don't think it actually could be realized very successfully.
But, as you mentioned, first of all, what the United States right now is doing is to try to violate the sovereignty, of independence and the political unity of the other country.
I mean, if it's followed or if it was tolerated, it means that more similar things would be done, not only maybe by the United States, but also would be done by other countries themselves.
Then nobody, no state, is safe, because everybody and every country in the modern world, the majority of them, absolutely majority of the states in the modern world, they all have the so-called minority problems.
Nobody is kind of the division is zero, internal division is zero.
Every country has internal division.
So it would create a very dangerous example.
And on the other hand, I think it also would add new uncertainties to Iran.
And for the original countries it might not be a good news because when the Kurdish groups inside Iran, they were rearmed, they might be used to target the Iranians in internal unity.
But they also could become a very important power for the Kurdish original militias attacking Turkey, attacking Syria, even attacking other Kurdish groups inside Iraq.
So it means that open the door for uncertainty.
So nobody is safe in this region.
So that's why I think the international and regional countries, they should oppose the United States very strongly and assertively.
Thank you very much for joining us.
Professor Wang Jing from Northwest University in Xi'an, China.
Coming up, a U.S. court orders U.S. customs to process refunds on illegal Trump tariffs.
This is World Today.
We'll be back.
Hello, I am Dr Digby James Ren, a political analyst and international relations scholar specializing in China area studies.
World Today offers unmatched in-depth perspectives on China's politics economics business, technology and society.
World Today's team of reporters and contributors provides valuable information from all of the world's major economies.
I hope you can join me on World Today for the very best insights and news from China, on China, and help to build a better understanding of China's role in the world today.
You are back with World Today, I'm Ding Han in Beijing.
The U.S.
Court of International Trade has ordered U.S.
Customs and Border Protection to pay refunds for tariffs imposed under the International Emergency Economic Powers Act.
The refunds are estimated to reach $175 billion.
The order could also help resolve more than 2,000 lawsuits currently before the court.
Meanwhile, U.S.
Treasury Secretary Scott Benson says Washington is likely to implement a 15 global tariff this week.
The new tariff is intended to replace the sweeping global import duties imposed by President Donald Trump last year, which was recently struck down by the Supreme Court.
The White House actually responded to that particular ruling by the Supreme Court by imposing a 10 levy, despite President Donald Trump claiming on social media that it would be 15.
For more.
My colleague Dou Hongyu spoke with Professor Yao Shujie, Chang Kong, Professor of Economics with Chongqing University.
175 billion dollars of refunds.
What does that mean to the us government system and how realistic is it for the government to process refunds of such a scale?
And how quickly could importers expect to see that money?
It is a fairly complicated issues 175 billion us dollars of import refund to the importers or the exporter in foreign countries.
It's a very complicated project.
It's easy to impose the tariff, but it's very difficult to refund the tariff.
I think it may take at least a few months or even more than one year to do the total refund.
However, the total refund is determined by the Supreme Court of the United States.
I think it got to be eventually implemented.
Because currently there is lots of lawsuits against Donald Trump's decision to impose this unexpected tariff which, according to the Supreme Court, is against the US general interest and the US law.
And now there are more than 2,000 lawsuits related to these tariffs still pending.
How significant is this decision for resolving legal disputes over the use of emergency powers in US trade policy?
The emergency powers have a limited degree of authority, because even the administration or the president have a limited power of how to impose the tariffs against another country, because there is a long-term interest of the United States in general.
By suddenly and periodically impose this emergency tariff by a certain president at different periods, it will actually undermine the US credit in the international trade system.
If some of the lawsuits come out to be successful, other people will follow the step to launch the lawsuit.
This would give a significant headache for the United States government.
Not only the amount of money is highly significant, given that the US already run into a huge amount of deficit and also the government in different states and also different parts of the country is already facing lots of financial constraints.
Now, by this additional amount of money, there needs to be refund, and also not only the direct cost of refunding, but there is an indirect cost of supporting the legal system.
So this is a very big lesson for the Trump administration.
The so-called very erratic personal decision on the spot to impose tariffs against other countries could even violate the domestic law.
I think the administration and the Supreme Court have a very clear conflict and, in my view, is the short-term and long-term interests of the country that is the united states, and this is why the lawsuits and also the funding become a fairly sensitive issue at the moment, And despite the ruling US.
Treasury Secretary Scott Besant has indicated that his country is likely to implement a 15 global tariff this week.
While Donald Trump previously announced similar measures that were struck down by the Supreme Court, how might the administration legally justify a new round of tariffs after the court ruling?
Yeah.
Mr. Besant is certainly supported by Donald Trump.
They have the same idea of how to implement tariff against other countries.
Fifteen percent of tariff is going to be implemented globally to different countries, and it has to be based on US law, which should turn out to be legal.
And in the future stage, if the Supreme Court found out that these kinds of laws still violated the national you know constituency, the national basic law, then there could be another problem.
I would just you know personally feel that I couldn't understand why Donald Trump and Mr Biden is so keen to implement these kinds of additional tariffs, because the people who bear the cost will be mostly the domestic consumers and it will drive the inflation up even further, making the general public life more difficult for daily life.
And this is not just against the interests of other countries, it's mainly against the interests of the domestic consumers.
So it is fairly ironic in a sense.
But Donald Trump is such a person.
He wants to demonstrate his personal power.
He wants to show to the outsiders, people in other countries, to say yeah, I'm a very specialized president.
I can do something which other presidents would normally not do.
And he tried to establish the uniqueness, including the mega policy, which had been implemented since the first round of the administration and is now continuing in the second round.
And not only the international trade.
As you can see the recent Iran crisis and also Venezuela.
All these kinds of attitude is reflecting Donald Trump's personal idea and characteristic.
I think he's going to make the US itself more and more difficult in the future, and not only in the trade system, but also in the global peace and also development issue.
And now there are also disagreements over the new tariff rate.
The White House plan to impose a 10% levy, but Trump wants 15%.
How might this policy ambiguity affect global markets, supply chains and business confidence?
Because this is precisely the purpose of Donald Trump.
Donald Trump is using a stick around the global trading system to say you know, I'm the big brother and I can, you know, stir the international trade system, whatever way I use.
So his personal is not even fearful. of the repercussion by the Supreme Court decision.
As you see, as the Supreme Court voted against his decision and decided to refund the trade tariff, he still maintained another way of using the tariff 10 or 15 percent.
To some extent, for most countries, it doesn't matter now.
Actually particularly in China.
In many other major trading partners in Europe Japan, South Korea, whatever your name they probably have got used to this kind of threat and uncertainty.
And the domestic trading system is already quickly adjusted to this kind of uncertainty.
However, whatever trading partners have responded to Donald Trump's erratic policy, it already sends a lot of problems and risks in the international trading system.
And you know, not only the trade, the supply chain, the production chain, the technological chain, all going to have changed.
You know, under this kind of uncertainty,
Certainly, the United States still a major trading nation.
But it's not going to be wholly dominant because Germany, China and other countries they are still playing a fairly significant role in the international trading system.
So lots of trading partners, they are going to see alternative channel where they can have more established and more certain pattern of trading decision.
So in the longer term, I think the United States is going to make itself into a deeper and deeper trouble.
And if they don't stop this, I think the trust on the United States is going to getting lower and lower.
Which can fight back to the US commercial system?
Professor Yao Shujie with Chongqing University talking with my colleague, Dou Hongyu.
You're listening to World Today, I'm Ding Hen in Beijing.
The European Commission has proposed a controversial Industrial Act to prioritize made-in-the-EU goods in public support and procurement.
A draft proposal says the Industrial Accelerator Act would target strategic industries, including energy-intensive industries, net-zero technology manufacturing and the auto supply chain.
The EU is looking to raise manufacturing to 20% of the bloc's GDP by 2035.
Deep divisions persist among EU member states over this particular proposed act.
Ireland and some Nordic countries have cautioned that strict local content thresholds could end up clashing with the EU's open market principles.
In the meantime Britain, Japan and the United States have also expressed concerns over the made-in-the-EU and bi-European initiatives.
So joining us now on the line is Liang Lingling, Director of Communication and Research with China Chamber of Commerce to the European Union.
Welcome back to the show.
Thank you for having me.
So why is the proposed act we are talking about here being criticized by some, including some internal voices within the European Union, as a misguided or protectionist approach?
Thanks.
This is really a good question.
You know, the IAA has been a thing in town for very long times.
Everyone was discussing, discussed it.
And we have a lot of leaked versions prior to the official release of yesterday.
And you know that it was also postponed several times.
So basically in Brussels, you can feel that it's a very heated discussion around this legislation.
So the on and on debate really reflects a very broad tension within the EU between strengthening industrial competitiveness and preserving the EU's longstanding commitment to open markets.
Some policymakers and member states.
As you rightly said, they worry that prioritizing made in EU goods in public support and procurement could tell the playing field in ways that resemble protectionist industrial policy rather than market-based competitiveness.
So from the business perspective, concerns mainly central on three aspects.
First, the strict local content requirements risk fragmenting supply chains that are currently highly internationalized.
And European industries, from automotive to renewable energy, really depend on global partners for technology, capital and components.
And second, such measures could potentially conflict with the EU's traditional advocacy of open trade and multilateral rules.
And third, they may trigger T410 measures from trading partners, which could ultimately reduce the efficiency and market opportunities for the European companies themselves.
So that is why some member states, particularly those with the very strong export-oriented economy, had to caution that industrial policy should enhance competitiveness.
And of course, a lot of trading partners like China have expressed concerns around it.
So we understand the proposal would tighten conditions on foreign direct investment in industries including the electric vehicles, as well as batteries, for example, solar panel and critical raw materials.
So if the proposal is adopted, how do you think it might affect the EV cooperation, for example between China and Europe?
Well, we currently have the initiative from the commission and for next steps, the parliament and the EU member states will debate on it, and let's see what the final version will be.
But the starting point, the current proposal on IAA to mainly business executives and observers already a very concerning beginning step.
So if the final law is adapted as it is proposed right now, We are in the view that the IAA will cast a very, very dark shadow over the cooperation between China and the EU regarding a lot of areas, including EV.
So the cooperation between Chinese and European companies in the electric vehicle ecosystem has developed precisely because both sides bring complementary strengths to each other.
China has built large-scale manufacturing capacity and virtual battery supply chains, while Europe offers very strong engineering capabilities, advanced research and important consumer markets.
So if the very strict foreign ownership caps or mandatory technology transfer requirements were introduced, this could complicate investment decisions for international companies and such conditions could create uncertainties about governance structures, intellectual property protection and long-term commercial viability.
So as a result, some investors might reassess the scale of timing of new projects.
And more broadly, the EV transition is a global challenge and achieving climate goals requires rapid development of affordable electric vehicles and resilient supply chains.
So cooperation between Chinese and European companies through joint ventures, technology partnerships and investment has played a very constructive role in accelerating this transition.
But policies like IAA, It could be detrimental if it is adopted like this.
It could be very detrimental to the future corporation, I'm afraid.
Thank you very much for joining us.
Liang Lingling, Director of Communication and Research with the China Chamber of Commerce to the European Union.
That's all the time for this edition of World Today.
I'm Dinghan in Beijing.
Thank you so much for listening.
Bye for now.
